Cash & Liquidity ManagementPaymentsTreasurers demand more visibility over payments, says ACT

Treasurers demand more visibility over payments, says ACT

ACH payments could cause treasurers to lose track of cash coming in and out

The increasing use of Automated Clearing House (ACH) payments have caused corporate treasurers to seek further visibility within organisational payment flows, according to Naresh Aggarwal, associate director, policy & technical at the Association of Corporate Treasurers (ACT).

“One of the things coming out from cash forecasting last year was a greater understanding around instant payments, faster payments, and low-value ACH type payments,” he says.

“Part of what treasurers need is more visibility of future payment flows. If instant payments replace ACH, you lose the clearing cycle and get no visibility at all of what may be going out or coming in.”

ACH payments – bank-to-bank payments made through the ACH network rather than via Visa or Mastercard – have surged, reaching a record high of 6.8bn payments in Q3 2020, according to the National Automated Clearing House Association (NACHA).

But the rise in these payment types has hindered corporate treasurers’ visibility over cash flow.

“Treasurers look at their cash management activities, and they’re seeing a greater increase of payments being made through faster payments, whether they’re inbound or outbound, which is making it more complicated managing cash on a daily basis,” says Aggarwal.

“The reality with fast payment is that the low limit provides some degree of protection against fraudulent payments,” he adds.

Investment in tech is therefore key to tackle difficulties faced by treasurers in the payment space.

“Treasurers need to be better informed about changes in payment infrastructures in individual countries and what this means for them. That requires investment in technology, finding the right payment partners, whether they’re banks or third-party software providers,” says Aggarwal.

“Technology is a key enabler to help corporates manage things like faster payments, greater visibility, or where the payments are. For sure, tech is a key part of that story and that requires investment.”

Obtaining a joined-up view of payment activities across the organisation also remains a challenge for treasurers, according to Aggarwal. Most companies have different stakeholders in the payment space internally, which could lead to issues as the payment rails overlap or converge.

Whitepapers & Resources

Transaction Banking Survey 2019

Transaction Banking Survey 2019

TIS Sanction Screening Survey Report

Payments TIS Sanction Screening Survey Report

Enhancing your strategic position: Digitalization in Treasury

Payments Enhancing your strategic position: Digitalization in Treasury

Netting: An Immersive Guide to Global Reconciliation

Netting: An Immersive Guide to Global Reconciliation